No Excuses: How to Successfully Forecast in 2021

How To Successfully Forecast in 2021

This is a Guest blog post by sales leadership expert Chris Tully. This is the second of a two-part series on “Preparing for 2021.” Thanks for reading and please “Like” and Subscribe! Thank you!

Don’t Let 2020 Become an Excuse: How to Successfully Forecast in 2021

Before we dive in, welcome to Part II of our two-part blog series about 2021 Sales Budgeting. If you missed Part I about how to appropriately establish your sales budget for next year, take a moment and read it first: Don’t Let 2020 Become an Excuse: Three Steps to Prepare for 2021

Now that you are all caught up on the three steps needed to create achievable 2021 revenue targets, the next step will be to develop a reforecasting model for next year. I am sure many people will approach forecasting with hesitation, but one thing that owners and sales leaders need to keep in mind is whatever their 2021 business plan, budget, and sales forecast looks like now, they are likely to look completely different by the end of 2021. In other words, the key to a successful navigation in 2021 will be adaptability.

It is likely there will be volatility in the market as the economy gets settled into the “new normal.” Your team will need to understand changes in demand as they occur so you are able to react and keep an accurate forecast. Part of that is understanding what your customers’ plans are by having your sales team engage with them more frequently. The other part is having a strong forecasting and adjusting process to capture the changing trends.

A sales forecast is the foundation for updating your profit projection which then allows you to recognize if investment plans can be carried out or if they need to be pulled back to balance the budget. The forecast is a critical leading indicator of your business’ overall revenue health and the guiding line for where it is heading. If you think just “winging it” will work since there are so many unknowns in how the market will play out next year, you are wrong. If a business is committed to success and striving to come out on top, they cannot function without a well-planned, and frequently reviewed and adjusted forecast.

Here are three guiding principles to help you develop an effective reforecasting and adjusting process:

Reforecasting Frequency

A business forecast in any year, not just in the midst of a pandemic, should be viewed as a living, breathing mechanism. There are things that affect it throughout the year that need to be evaluated. Given the market disruption over the past 8-months, at a minimum, owners and sales leaders need to revisit and rebuild their full year 2021 budget on a quarterly basis. This quarterly cadence means that after 2021 Q1 closes, a new full-year forecast should be created. This should be done again after month six and again after month nine.

This would result in having your original forecast that was used to build your initial budget, plus three reforecasting cycles. While this may seem like a lot to do, one thing that 2020 should have instilled in owners is to expect the unexpected and be prepared to appropriately react to market conditions and remain flexible in their plan.

NOTE: It is critical to be constantly monitoring your Sales Pipeline throughout the year, not just quarterly. While we’re recommending that a reforecast of your entire business waits until the end of each quarter, the Sales Pipeline requires ongoing focus to provide day-to-day sales visibility. This will also be helpful given that an accurate Sales Pipeline needs to be readily available to feed into the quarterly reforecasting process.

The 20,000-Foot View

While a quarterly review and reforecast is absolutely necessary, you will want to keep your original budget created in Q4 2020 as a point of reference and comparison as you reforecast throughout the new year. The original plan provides a “big picture” or “20,000-Foot View” for the year, giving you visibility into potential gaps in meeting your profit number during the quarterly reforecasting cycles.

In the event your sales are slower to ramp-up than projected, you may need to examine how you are positioning your resources, what you are doing for marketing, your head count, pending investments, etc. to reach your end of year profit goal. On the flipside, if your revenue recovery is being achieved more quickly than anticipated, you may positioned to make investments within your budget sooner to fuel momentum versus waiting to act.

Isolating Gaps through Team Accountability

Once you get through Q1 of the new year and produced the first reforecast, take a step back to inspect its reliability. This becomes difficult if your Sales Team is not tightly aligned to your sales process, or they are not trained properly on how to navigate it. The key to ensuring accurate reforecasting starts with accountability at the salesperson level. With a solid process that is fully understood and good controls that provide key areas of measurement, the sales team is equipped to record their results in your CRM. This will ensure an accurate and achievable reforecast is created while also helping you identify and isolate gaps to guide your sales team and business toward end of the year goal achievement.

Ask yourself…

  • Do I have a systematic way of generating certainty in the reforecast by taking YTD results and coupling them with future pipeline that I have confidence in?
  • Do I have a robust process and methodology to forecast?
  • How accurate have I been previously in achieving my forecast based on what my sales team has given me?
  • Do I have the ability to look into the pipeline and review deal probabilities to verify they look reasonable and not padded?

If you have gaps in your ability to accurately reforecast

your business, STOP and request a consultation call!

Leveraging an experienced Outsourced VP of Sales may be the

answer to help build this heightened level of sales infrastructure.

While 2020 has dealt businesses a host of obstacles to overcome, owners should not let the uncertainty affect 2021 planning. Yes, there are many factors that will need to play into how next year is planned and forecasted but this level of diligence should be the same approach taken in prior years to ensure accurate projections. Given all of the outside factors playing into sales, creating a systematic approach to reforecasting and adjusting will ensure profit goals are met while also isolating sales performance issues early on so original revenue targets can also be realized. Flexibility, the ability to have a bird’s eye view of your sales performance, and team accountability are the keys to making next year a success.

Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”

No Excuses: Three Steps to Prepare for 2021

Don't Let 2020 Become an Excuse: 3 Steps to Prepare for 2021

This is a Guest blog post from sales leadership guru Chris Tully. This is Part 1 of a two part series on Preparing for 2021. Please “Like” and Subscribe! Thanks!

Don’t Let 2020 Become an Excuse: Three Steps to Prepare for 2021

With a sense of uncertainty hanging in the air, Owners and Sales Leaders are reluctant or have even become paralyzed when it comes to developing their 2021 sales budgets. It is a completely logical reaction given all that has happened in 2020, but it is already Q4 and it’s now or never to plan for next year. The important thing is to not let the uncertainty of 2020 become an excuse or crutch for not creating your 2021 sales budget with anything but a strong, attainable plan.


The key to successful planning lies in tapping into all the bumps in the road that you encountered in 2020 and working backwards. There is no doubt that we have learned a lot this year – about our businesses, about market behaviors, how to crisis plan, and about how to refocus sales efforts. All of that information needs to be strategically used to develop your sales budgeting and road map for 2021.   Most of us will likely want to be in a different place at the end of 2021 versus where we are currently as 2020 winds down. But the question is: How do you get there?

We are sharing three steps to help you isolate the pieces to this equation and how they need to play into forming your 2021 sales forecast.  

STEP 1: Take inventory of your strengths. Before you begin generating your 2021 sales budget, ask yourself what you know, and what you don’t know (even that is important to account for!) Ask yourself:

  • Do you have a high degree of predictability and comfort-level with how you are going to finish top-line revenue in 2020?
  • Are your current forecasts performing within 20% of projected numbers?
  • Do you have a forecast methodology that you trust?

If you answered “yes” to the above, make sure the remainder of your2020 sales plan is mapped out and proceed to Step 2. Congratulations on having clarity into your current situation because that is your starting point for 2021 planning! If you answered “no”, STOP and request a consultation call! If you do not have confidence with where your current plan will finish or a clear path to achieve its goals, you cannot have confidence in building a reliable plan for 2021. Don’t worry if you answered no – you’re not alone. 2020 has been filled with anomalies that even the best planning could not have accounted for. In fact, about 89% of owners and sales leaders struggle with setting effective sales goals and quotas under normal circumstances, let alone under the market conditions that this year has tossed our way. Sales Assessment Statistics-1

STEP 2: Identify the considerations that need to be layered onto revenue trending that revealed itself in Q4 2020. It is important to really understand and pinpoint all of the changing market aspects that will continue playing into your sales results in 2021, as well as the anomalies that happened throughout the year, to come up with an attainable 2021 sales budget.

You’ll want to designate your accounts or markets into three categories for 2021 based on the shifts you saw in the market as a result of COVID-19, and map them out accordingly.

RETAIN  Accounts or markets that have organic demand and buying habits are already trending back toward normalcy in the last quarter of 2020.

TRANSFORM – These are accounts or markets that experienced demand vanish in 2020. Under this category, you will need to completely shift to serving all new markets in 2021.

HYBRID – This is a combination of Retain and Transform – accounts or market in this group have contracted but are still active. However, to make up what is dissolved during 2020, you will need to subsidize with new markets in 2021.

For your “Retain” or “Hybrid” accounts or markets, Owners and Sales Leaders must ask themselves if they can expect buyers behavior to mirror what they saw in 2019 or will it be more like what they are seeing as business is trending back toward a “new normal” in late 2020? Whichever the case, you’ll want to apply the proper revenue pattern to your sales budget for 2021.  Other things to consider in your projections are new product and service offerings. What new expenses or resources will be needed to make this new offering a success? Owners must also pay attention to macroeconomic trends that have the potential to heavily impact select industries or even dissolve them over time. If you are unsure how to develop a layered model that accountsfor these variables, STOP and let’s have a conversation.

STEP 3: Set the sales team loose to go after a quota they believe can be achieved. You’re in the home stretch! Now that you established your 2021 sales budget, it’s time to formulate quotas to achieve the number. Ultimately, the business world knows 2021 will be another year of unknowns, so the objective is to gear up your sales team to climb the next rock going into 2022. Ask yourself…

  • Are you certain you have the right balance in your comp plan to incentivize your sales team while also allowing for appropriate company profitability?
  • Have you traditionally been good at setting Quotas that have been consistently attained? If not, you will frustrate your salespeople with overly aggressive growth goals without having clarity on how attainable they are. Sales turn-over is not a risk you want to take as you rebuild your revenue path.

The real prize will be successfully positioning yourself differently by this time next year. 2022 will be the time when record breaking sales will be realistic, and a time when prepared companies can leap-frog their competition!

Make sure to watch for my next blog on Reforecasting and Adjusting in 2021. This will be critical in 2021 as we navigate changing market dynamics.

Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”

The Innovation Imperative – 5 Questions to Ask


Going into the Covid-19 pandemic, almost all organizations were facing myriad challenges in terms of fiercer competition, more discriminating customers, longer sales cycles, and difficulty in differentiating their offerings, mostly due to tremendous advances in technology and a demand for greater transparency.

The pandemic has accelerated what forces were already in play, in addition to changing the way we all live and work, and devastating certain industries and business models. Now more than ever, every organization should be aggressively looking to innovate…or go extinct.

Every organization is different, with its own set of unique markets, customers and business drivers. As we work with our portfolio companies in helping them innovate, we start with the following 5 questions:

  • How congruent is the way you innovate with your vision and appetite for innovation?
  • How effectively do you articulate your vision and appetite for innovation to your stakeholders?
  • Is innovation a crucial part of your team members’ job descriptions?
  • Do you have the right processes to create and bring innovation to market?
  • How do you measure ROI and your ability to meet customer expectations?

Tying vision to appetite for innovation – This is core to a company’s ability to succeed as it iterates and pivots. Is the innovation imperative part of your company’s DNA? Those who embrace creativity and boundaryless thinking are essentially building innovation into the way they operate.

Articulating your vision for innovation – It’s not enough to just think in a vacuum. It’s necessary to evangelize the need for different thinking and changing for the better. The most innovative organizations talk about their innovation goals and progress, and they actively share this with their teams, shareholders, customers, suppliers, etc. “Walking the talk” brings it all together for stakeholders and they can all participate to help companies innovate.

Team members as “innovators” – We have heard the mantra that “everyone is in sales.” Embracing this mentality has benefitted many companies and their employees. The companies who are most effective at innovating think that “everyone is an innovator,” and they actively engage all team members in formal and informal exercises and conversations for ideas on organizational self-improvement.

Processes for Innovation – This takes leadership from the top, and an assignment of resources to execute on the innovation imperative. The most innovative organizations create and implement innovation processes,  measure results, and iterate off that feedback. This set of processes is a playbook for how companies can continue coming up with the best and most creative ideas.

Measuring ROI – The best kind of innovations have a direct and measurable ROI. Some will not be measurable, but will have benefits (examples could be improved employee morale, increased retention, customer lifetime, value, etc.) and should therefore be undertaken. The discipline of calculating ROI by itself is extremely useful, as it forces a closer examination of the various drivers of a business.

In summary, what we are looking for are the vision/desire for innovation, how it’s communicated, engagement of team in this effort, execution structure, and tangible ROI. The answers to these five questions will form a good foundation from which any organization can start looking at things differently and innovating its way to greater success.

The TikTok Moment – lessons learned from the modern day Sputnik Moment of #DigitalTransformation

Free Stock Photo of Leadership Concept with Paper Airplane Created by Jack Moreh

This is a Guest blog post from Jet Lu, digital innovator and digital transformation leader who is Director of Digital DevOps for the City of Baltimore.

On October 4, 1957, the Soviet Union launched the world’s first artificial satellite, Sputnik 1, from the Baikonur Cosmodrome. It was perceived as a technological gap between the United States and Soviet Union, and caused public fear and anxiety. Days later, president Dwight Eisenhower addressed the nation with a subdued message: “So far as the satellite itself is concerned, that does not raise my apprehension-not one iota,”. However, it wasn’t long before Eisenhower declared the true crisis and threats the United States must confront. The true crisis and propaganda coup as the result of Sputnik was not truly suppressed until 10 years after, when we put the first and only humans on the surface of the moon. That is still standing true until this very day.

We got over the crisis and took lead in the competition by accepting the competing factors, and excelling ourselves to be the best at it. We have to give the same sense of urgency and priority to digital transformation.

In August 2020, executive orders were issued aimed to ban social media platforms TikTok and WeChat. These may not be familiar names to many prior to the political hype, but it does not change the fact that they have 500 million and 1 billion active users respectively. There’s a global competition over artificial intelligence, cyber security, digital connectivity, and digital influence. Unfortunately, we do not have a solid lead in the race anymore, and some analyst may say we are losing the lead position. If you haven’t come to the realization this is at the same scale, if not greater, than the historic Sputnik crisis, then you have positioned yourself behind the eight ball. 

We have hit a ‘TikTok moment’, and I want to coin this phrase. I want our children to remember this moment and what it means in history. Why? Because once again, we are in reactive and defensive mode. It is the crossroads of a modern day revolution, a digital revolution. We should use this as fuel for digital transformation to truly come out ahead of the race from this ‘TikTok’ crisis.

We have long been in the state of a developed country. However, have we achieved being the first digitally developed country? The digital equity issues across the States screams “digital crisis.” The digital world is borderless, and it invites your competitors to your front steps. It can be a healthy competition though, or even a healthy collaboration if handled right. It is not all necessarily negative. We must take the right steps as we confront the challenges and threats it presents, and take aggressive and transformative steps forward. I’m not a politician. I’m a transformation leader, and in today’s world, the focus is digital transformation. Banning TikTok or WeChat is an attempt to avoid the risk, but there are more effective steps we should take in order to mitigate the risks & threats in a more transformative way.

Lesson #1: Honor the duct tape solutions, and take them seriously

Digital innovation has been disruptive for quite some time, from the dotcom era (from 1995 to the dotcom bubble burst in 2000), to physical to cyber, and now cyber to physical. Much of how we are adapting to the digital solutions are seen as duct tape approaches, such as injecting social media usage to existing sales & marketing outreach, as well as employee engagement.

Two reasons to take these duct tape approaches seriously: First, businesses use the new digital capabilities creatively. The business value we could extract from a particular technology is only limited by the appetite of an organization to try new things, and take on calculated risks. Just as there’s not only one right use for duct tape. Second, it is a misconception that these digital duct tape solutions are temporary. As technology disrupts the status quo, we can expect to strategize using these digital equivalents of duct tape as a long term approach. We should come to the realization that how we used to run our businesses is becoming the band-aid we should rip off quickly to minimize the pain.

The China-based messaging app, WeChat, served as the most popular duct tape solution testbed for personal and business use in China. Just as Mark Zuckerberg once said that “private messaging, ephemeral stories, and small groups are by far the fastest growing areas of online communication”, and messaging is at the core of Facebook’s future. WeChat is taking a similar approach. Today, WeChat is the go-to app for personal messaging, group messaging, information sharing, ride hailing, making payments, receive payments, and digital wallet. These are just a few of the digital duct tape equivalents that have proved their effectiveness.

Lesson #2: Don’t be afraid to challenge established ecosystems

This is exactly how technology such as TikTok, WeChat, and many others are disrupting the digital maturity we proudly exhibit. For example, our banking industry is an established ecosystem with very mature endpoint capabilities. Businesses are able to equip themselves to accept different means of payment, and Point of Sale (POS) support is very common. In many parts of the world, affordability to join this ecosystem continued to be a major challenge. Square disrupted this space by lowering the cost of entry and improving the end user experience. Furthermore, platforms like WeChat and Alipay disrupted the space again by providing a contactless and zero-cost endpoint support alternative, the pay by QR code option. This is by far the most impactful digital duct tape equivalent in 3rd world and developing countries. Today, WeChat and Alipay QR code payment is the default method of payment for over 1 billion users globally. This digital duct tape has earned a permanent seat at the high table.

Lesson #3: Digital Transformation has a leading role in responding to today’s business challenges

One thing we have to be very clear about is that digital transformation equals business transformation in the current landscape. What digital transformation is NOT, is to simply make changes on how your IT supports your business. Technology is an enabler, but how you apply and mobilize it to transform your business is the key. Because it takes enterprise level leadership to take the charge in shifting the culture, transform operating processes, bridge knowledge gaps, and repurpose resources. There are deliberate implications to all areas of an organization, such as procurement, legal, product development, sales & marketing, business administration, manufacturing, and etc. 

The low hanging fruits of digitization in a mature business environment are digital workers, digital influence, and turning data into action. 

Digital Workers

The concept of digital workers, via Robotic Process Automation, is a widely adopted and practical way to apply to operational challenges that are time consuming and repetitive. Robotic Process Automation solutions are not meant to replace human workers, but to enable workers to do more while eliminating human errors. The human worker still owns the business intelligence to support the delivery of the business value. Robotic Process Automation is perfect for business processes that contain tedious tasks such as data processing, user notification, task hand-off, document routing, calculations, calling APIs and etc.

Digital Influence

In today’s world, influencers do not have to spread their ideas in person. With the help of digital technology, mass outreach is immediate, targeted, and traced. Most importantly, audience feedback works the same way. This is being used heavily today, not only in businesses’ sales & marketing campaigns, but also political campaigns. 

The effectiveness is beyond the traditional media. Today’s technology enables influencer campaigners to predict personality traits, consumption habits, as well as political orientation of their target audiences. Then through a series of effort to put information in front of their audience, while the messages may be directly or indirectly related to the objective, to shape or shift the audiences’ decisions. The decisions are often perceived as your own without even realizing the influencing factors. A study of the infamous case of how Cambridge Analytica turned data from Facebook that was publicly available into political campaign tools, makes me ponder just how powerful and destructive it can be for data to be in the wrong hands. Especially for those who have possession of your private data.

While that may be a bit extreme, but a simple digital outreach to get information to your audience, and automate the feedback loop from your audience, is definitely a low hanging fruit.

Turning data into action

Many organizations today are looking for innovative ideas with different motives. Some are trying to align solutions to their digital transformation strategy, some are for making the headlines, and some are trying to improve existing Key Performance Indicators (KPI). However, a common misconception is that it has to be a new product or solution. There are so many existing products and solutions that were put in place and never executed to its full potential. In most cases, leveraging data from existing solutions is a low hanging fruit to upgrade these solutions to realize additional business value.

In a panel discussion earlier this year, I talked about exactly how this applies to the Internet of Things (IoT) solutions, and how we can turn existing Operational Technology (OT) into IoT solutions by the convergence of Information Technology (IT) and Operational Technology (OT). If we look at all IoT solutions in stages of maturity, I would have to agree with John Rossman. The four levels of IoT are

  • Level 1: tracking capabilities – this is where a single device collects data, but the value it provides is limited, and it is only available to the owner of the data.
  • Level 2: insights and adjustments – this level of IoT devices comes with sensor based analytics, and data is captured in the cloud. There may also be simple analytics and machine learning algorithms applied to the data. However, there’s no real-time adjustment, and there’s no network value where it connects & interacts with other devices.
  • Level 3: optimizations – this is where a network of devices are in play, and based on the data generated, they are making real-time and automated adjustments.
  • Level 4: network coordination – this is the ultimate goal and the most powerful state of IoT solutions. At this level, insights and actions are improved with not just one type of devices in the network, but variety of devices. In addition, the network is capable of handling entry and exit of devices to the network.

Many IoT solutions that were put in place by businesses and local government are of Level 1. As a matter of fact, many legacy operational technology solutions that are in use today can be considered as Level 1 IoT solutions. What they all have in common is the opportunity to level up to Level 2 or Level 3 by simply putting the data to work.

Lesson #4: Regulatory effort needs a sense of urgency

Digital transformation is not just about tech solutions, it should be include the full package of solutioning and operationalizing the solution with the support of necessary laws, regulations, and policies.

Today, mobile devices are tethered to users worldwide running a variety of applications, and they are generating an immense amount of data. The number of devices and data streaming agents per capita is growing by the day. The challenge is no longer who can obtain the data, but how we regulate a level playing field to embrace it, exploit the opportunities, control the risks, and stay ahead of it. When mobile phones were first widely adopted, getting information from an individual isn’t a secret weapon anymore. This also means minimal cost of entry to leverage real-time point-to-point communication. Such technology was once only accessible and affordable by businesses and military use. Technological advancement caused a shift in the society and put the power in the hands of individuals. To that extent, smart mobile devices ignited disruption in many areas. Some were not so obvious at the time, such as ride hailing services. There are risks and threats from every piece of technology, but there are also opportunities. Risk and threat mitigation is not as simple as disallowing the use of new tech. We are still dealing with phone scammers today, but we have legal and regulatory support. Most importantly, we have innovated beyond that and gained new grounds and new competitive advantages.

Conclusion

The overarching lesson to be learned is that we must get serious about digital transformation. We have to do it now, and we have to do it right. The impact on our economy and our quality of life will be substantial, and the impact is in all industries.

A stroll through Chinatown anywhere in the world will give you a taste of the Chinese culture. A few good ones will even make you feel like you are visiting China. Authentic food, sounds of the native tongue, and structures and signs resembles the culture to a tee. But it does not stop there. Paying for food and services just as they do in China is widely adopted as well. That’s right, it’s part of the culture to have a QR code in front of every cash register of every business. Customers open their WeChat app and scan the QR code to transfer funds from their WeChat wallet to the vendor’s WeChat wallet. The Chinese Yuan moved from one account to another in China, and never set foot in a foreign market, with zero recorded impact on the GDP of where the products and services were provided – and zero taxes collected!

That’s just one example of a problem created by not being in the front of digital innovation. With enough of these kinds of problems, we will find ourselves in a crisis. However, looking at it from a different angle, these are good problems to have. It means that someone is trying to do something right, a ripple effect is created. There are opportunities in every crisis. We should not panic, but instead exploit the heck out of those opportunities so that we can come out ahead of the TikTok crisis.

Jet Lu is a digital innovator, speaker and digital transformation leader. He is Director of Digital DevOps for the City of Baltimore and can be reached at jet.lu@outlook.com.

How B2B Buyer Behavior Has Changed

This is a Guest blog post by Chris Tully. Some great info and stats below regarding the changing nature of B2B purchasing. Thanks for reading and please subscribe!

How B2B Buyer Behavior Has Changed

I’ve always believed that at the heart of it, business buyers are just consumers with different priorities and a bigger checkbook.

Businesses now shop for suppliers like we shop as consumers: digitally. That behavior is increasingly the norm. These pandemic months of sheltering in place have only accelerated changes in B2B buyer behavior.

Comfort in socially-distanced shopping was already here way before the COVID-19 pandemic, leading to the demise of brick-and-mortar stores that didn’t keep up with the times (seller beware). Digital shopping:

  • Transcends business-hours time barriers
  • Allows for wide product search and research before point-of-purchase
  • Provides instant give-and-take help chats, and
  • Leads to instant purchase gratification.

What’s not to like?

Consumer digital shopping

Let’s take the auto industry example of consumer digital shopping outlined in a McKinsey report:

  • Digital is the number one information and customer influencing channel. A huge 70% of vehicle buyers start their journey digitally.
  • Digital has given rise to very well educated customers. They do their research online before they purchase.
  • Digital car sales are a matter of fulfilling prerequisites and of creating a value proposition.

The transition to fully online sales is inevitable (see the www.carvana.com model for an example in action). Digital car buying is turning the existing dealer model upside down.

Business digital shopping

For business buyers, B2B buyer decision-making is largely driven by their learned consumer behavior. As recently as 10 years ago, says a Forrester study, “Vendors held the power of commerce by controlling information. But the business consumer, digitally savvy and self-directed, is now in control.”

  • 92% of B2B purchases start with search.
  • 68% of B2B buyers prefer to research online on their own, up from 53% in 2015.
  • 60% of B2B buyers prefer not to interact with a sales rep as the primary source of information.
  • 75% of B2B buyers use social networks to learn about different vendors.
  • 62% of B2B buyers say they can now develop selection criteria or finalize a vendor list — based solely on digital content.

Now more than ever, business marketing and sales decision-making means figuring out how to attract and keep a buyer online. I’ve seen statistics that say nearly 40 percent of clients move on if your digital platform doesn’t perform well.

How you present your company digitally is hugely important: you can either represent your excellence or create a huge credibility sink.

Think of your website as your first sales call

  • Your website needs to speak well for you in engagement, content, and performance.
  • Your demand generation strategy needs to match up to buyers’ behavior – if 92% of B2B purchases start with search, then you need to control the message in search results.
  • If your value proposition isn’t clear on your site, you will lose credibility. And since buyers don’t really want to speak to a sales rep, you could lose the buyer entirely.

Know how your prospects shop

Get the right answers to the questions below to precisely define your target client. Then apply them to your site. SEO should result in sustained lead flow.

  • Where do they look for you?
  • What are they looking for?
  • What keywords drive the type of leads that you want?
  • How do you show up on searches? Is your website optimized for SEO success?
  • What are you telling buyers that is meaningful and relevant? Why do they care?
  • What is your call to action?

Plan how to respond to a solid online lead

The more complex and expensive your offering, the sooner you will want a sales person involved in client interaction.

  • Who responds first, an email bot or a real person?
  • What’s the objective of the first interaction?
  • Where does the first interaction take place (email, telephone, virtual meeting)?
  • How are you going to monitor progress?

Recognize the buyer behavior evolution

Buyer behavior has been evolving for more than 25 years, since the first secure retail transaction over the Web in 1994. Both the Amazon.com online shopping site and eBay launched in 1995.

Most B2B decision makers have been virtual shoppers for quite some time.

2017 Frost & Sullivan study asserts that B2B online buying will continue to evolve to be more like B2C: “Customers expect things to be online and intuitive, desiring a self-service model with personalized and targeted B2B sales accessible from anywhere at any time.”

It’s probably time to recognize that your sales strategy has to match the way your B2B buyer wants to buy.

Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”

Brace for Economic and Tax Uncertainty After the Election

This is a Guest blog post from Pete Ryan, CPA and Michael Wetmore, CPA, founders of the accounting and consulting firm of Ryan & Wetmore.

Introduction

The next six months will bring a period of uncertainty. Businesses and individuals must plan to react to the many changes in stimulus plans, Covid-19 disruptions, tax laws, estate laws, and other laws and regulations based on election results. This article should not serve as legal advice – companies should plan to consult with attorneys, CPAs, investment advisors, insurance advisors, and others. Regardless of the election results, there will be big changes. Sources of systemic change include:

Comparing Tax Proposals: Income and Capital Gains

  • Tax proposals are subject to change during the legislative process and may get watered down by the other party or moderate lawmakers.
  • Changes in control of government could still bring big changes and tax increases, expert tax planning by tax advisors and CPAs will be essential.

Overview

  • Some notes on the process of passing tax legislation:
    • There is precedent for retroactive tax proposals, so a tax bill passed in 2021 could be retroactive to the first day of the 2021 tax year.
    • Some of Biden’s tax proposals could be phased in over time rather than taking effect immediately.
    • Although it is common for Presidents to have tax proposals, all tax legislation must originate in the House, where Democrats are likely to keep their majority.
    • As changes make their way through congress, they are usually watered down somewhat – especially if control of government is divided.
    • If on party win a simple majority of both houses, they can avert a Senate filibuster by passing a tax bill in a process called budget reconciliation.
    • Many parts of the Tax Cuts and Jobs Act of 2017 (TCJA) are temporary and will expire in the next several years even without legislative action.
  • Biden’s tax proposal includes corporate tax increases and income tax increases for people making over $400,000. Trump’s plan is mainly to expand/extend the TCJA tax cuts, though he has issued few details about second-term tax plans. Both candidates have committed to not raise middle class taxes.

Payroll Taxes

  • Biden’s proposal imposes a 12.4% Social Security Payroll tax on wages above $400,000, creating a payroll tax “donut hole,” where income between $137,700 and $400,000 does not incur the payroll tax. This also affects self-employment taxes for individuals. (It’s not clear when or how this will be implemented.)
  • Trump’s plan institutes a payroll tax holiday for the employee-side payroll tax deferral that is currently taking place.

Corporate Taxes

  • Biden’s proposal increases the C-Corporation income tax rate from 21% to 28% (lower than the top rate of 35% in effect prior to the TCJA) and establishes a corporate minimum tax on book income.
  • It also doubles the tax rate on GILTI and imposes it country-by-country.

Individual Income Taxes

  • Biden’s plan would raise the top individual income tax rate from 37% to the pre-TCJA level of 39.6%.
  • It would cap itemized deductions at 28% of value for those earning over $400,000, temporarily increase the Child Tax Credit to a maximum of $3,000 and the Child and Dependent Care Tax Credit to a maximum of $8,000 from $2,100. Biden’s plan includes other middle class tax relief.
  • It would also bring back a first-time homebuyer tax credit of up to $15,000.
  • Biden’s plan would reduce 199A 20% deductions over 400k.
  • Trump’s plan would maintain and extend the tax cuts in the TCJA and possibly cut middle class income tax brackets.

Capital Gains

  • Currently the top long-term capital gains bracket is taxed at 20%.
  • Trump has proposed lowering the top rate to 15% or indexing it to inflation.
  • He would also expand the TCJA “Opportunity Zones” program, which provides capital gains tax relief to encourage long-term investments in economically distressed areas.
  • Biden has proposed taxing long-term capital gains and qualified dividends at the ordinary income tax rate of 39.6% on income above $1 million and eliminating the “step-up in basis” for inherited assets.
  • Many individuals and businesses will want to consider selling or donating appreciated assets (such as marketable securities) by December 31, 2020 or before new laws are enacted in 2021 – consult your advisors and CPAs.

Estate Planning

Estate Tax

  • The TCJA extended the estate tax exclusion from about $5.5 million to $11.4 million, but this is set to expire in 2026.
  • Biden has previously said he supports both lowering the exclusion to “historical norms” (which could mean the pre-TCJA level of $5.5 million) and returning estate taxes to “2009 levels” (which could mean a $3.5 million exclusion and an increase in the top rate to 45%).
  • Biden also supports ending the “step-up in basis,” which allows estates to realize capital gains without incurring capital gains tax upon the death of their owners.
  • Many individuals are rushing to their estate attorney before December to discuss making large gifts.

Grantor Retained Annuity Trusts (GRATs)

  • A GRAT is an irrevocable trust that is set up for a period (a tax is paid upon establishing the trust). An annuity is paid from the trust every year, and when the trust expires, the beneficiary receives the assets tax-free.
  • The TCJA increased the estate tax exemption to $11.4 million, but it would decrease if the provisions expire in 2026 or if it is repealed, making GRATs more attractive.
  • Also, GRATs are most effective when interest rates are low – as they are right now.
  • Neither candidate has proposed changes to GRATs, but the way they are treated for tax purposes could change in a new tax proposal.

Sales to Intentionally Defective Grantor Trusts (IDGTs)

  • IDGTs are irrevocable trusts where trust income is treated as the grantor’s for income taxes, but the assets are not treated as the grantor’s for estate taxes.
  • Just like with GRATs, the candidates have not talked about IDGTs specifically, but the way they are taxed could change in a new tax bill.

Accelerating or Deferring Income or Deductions

  • Given the potential for big changes to the tax system, accelerating or deferring income or expenses into a certain tax year can have big advantages (though the effectiveness depends on projections of the future).
  • These strategies are complex and depend on future conditions – talk to your advisors and CPAs about them.

Accelerating Income in 2020

  • Accelerating income in 2020 has three main advantages: (1) The TCJA cut the top income tax rate; (2) losses due to the economic downturn may push taxpayers into lower brackets this year; (3) accelerating income increases a taxpayer’s AGI limitation for charitable contributions.
  • If taxes are hiked in 2021, the changes could be retroactive to the first day of the 2021 tax year, so receiving income in 2020 could be preferable to 2021.
  • Some income acceleration strategies include: Converting an IRA to a Roth IRA, electing out of installment sales, triggering an inclusion event for opportunity zone investments, harvesting capital gains, foregoing like-kind exchanges, exercising stock options, and declaring and paying C corporation dividends.

Accelerating Deductions in 2020 or Deferring Deductions in 2021

  • Biden’s tax plan caps the tax benefit of itemized deductions to 28% of value for those earning over $400,000, potentially increasing the benefits of deduction acceleration.
  • On the other hand, income and payroll tax hikes in 2021 could increase the benefits of deduction deferral to 2021 (since they would have a greater tax benefit in 2021).
  • Most cash-basis businesses normally accelerate deductions at the end of year to reduce taxable income. In 2020, they may decide not to this.

The Wider Economy

  • The state of the economy is evolving day-by-day and new stimulus is likely to be the top priority after the election. Be sure to monitor email updates from Ryan & Wetmore.

New Stimulus

  • After briefly ending negotiations on new stimulus, the Trump administration proposed $1.8 trillion in stimulus, but the proposal was immediately rebuked by House leadership (as not enough) and Senate leadership (as too expensive).
  • The Trump Administration also pushed for a bill repurposing $130 billion in unused funding from the Paycheck Protection Program for a second round of PPP, but House leadership rejected it.
  • The House originally passed the $3 trillion HEROES Act (which was rejected by the Senate) and then passed a reduced $2.2 trillion HEROES Act.
  • New stimulus after the election will be a top priority after the election no matter who wins. Make sure you get updates from your advisors.

Other New Bills

  • No matter who wins, stimulus will probably be the top priority after the election.
  • However, if Democrats do well, they will probably push for one or more other big initiatives (such as a big infrastructure package). Some of their priorities include:
    • Healthcare, green infrastructure/climate, police reform, immigration reform, and guns.
  • Two top priorities are expanded on below:
    • Healthcare reform: The House has already passed a bill to expand Obamacare subsidies and lower drug prices. Joe Biden’s plan also includes creating a public option.
    • Green infrastructure: The House has already passed a $1.5 trillion green infrastructure plan (similar to Biden’s $2 trillion plan) that includes money for roads, bridges, transit options, housing broadband coverage while emphasizing reduced emissions and transitioning the electricity grid and generation to renewables.

Long-Term Interest Rates

  • The Fed has cautioned that the pandemic will continue to weigh on growth, employment, and inflation in the near and medium terms.
  • As a result, “dot plots” from the Fed Open Market Committee show that most members do not expect to raise interest rates above 0-0.25% before 2024.
    • Similarly, bond markets imply that traders do not expect the Fed to substantially hike rates until late 2023 or early 2024.
  • In August, Fed Chair Jerome Powell said the fed will likely pursue an inflation target of “moderately above 2 percent for some time,” indicating plans for low rates.
  • Low rates mean that it is potentially a great time to talk to advisors to consider refinancing existing loans.

Banks and Deferred Loans

  • When states began locking down in March, banks rapidly implemented forbearance programs, allowing borrowers to defer loans and avoid default. Stimulus programs also allowed some people to keep making payments when they might otherwise default.
  • In the third quarter, JPMorgan reduced reserves for loan losses, indicating that it expects fewer nonperforming loans, but it also noted a lot of uncertainty.
  • There may be a real estate stimulus plan – all borrowers should monitor stimulus plans and review loans for refinancing opportunities, stimulus, and forbearance agreements.
  • Businesses should be in regular communication with their bankers about extending lines of credit, terms, etc.

State and Local Taxes (SALT)

The SALT Deduction

  • Prior to the TCJA, taxpayers could deduct all state/local property taxes and the greater of income or sales taxes from taxable income, but these deductions were capped at $10,000 annually by the TCJA.
  • In late 2019, the House passed a bill to eliminate the SALT deductions cap except for taxpayers with AGI above $100 million (which then died in the Senate).
  • The Biden campaign has confirmed that he supports repealing the $10,000 cap.
  • Paying your fourth quarter 2020 state income tax estimates between January 1, 2021 and January 15, 2021 may be a prudent planning move for most taxpayers – talk to your advisors and CPAs.

Sales Tax

  • Tax revenues of states and localities are projected to fall a lot in fiscal year 2021 and beyond while spending on public health will soar – and many states have requirements that they balance their budgets.
  • This could lead to big revenue shortfalls and state and local tax hikes if the balanced budget provisions are not repealed and there is no federal government aid.
  • Sales tax is set by states and localities so elections to national government do not have a direct effect on them.
  • However, the original version of the HEROES Act passed by the House included over $1 trillion in state and local aid, which could reduce state budget shortfalls.

Health Insurance

  • Employers expect about 4 to 5% benefit cost growth on average in 2021 compared to 2020, roughly in line with previous increases.
  • People may use more medical services in 2021 because they put off routine care and elective procedures for much of 2020 due to the pandemic, and treating COVID cases carries large healthcare costs (especially given the potential for a case spike in the winter).
  • Some likely trends in health insurance in 2021 include: Cost increases of around 4 to 5%, expanded options for virtual care, increased focus on mental health, more on-site clinics, greater access to “Centers of Excellence” (options that encourage employees to seek specialized care at hospitals known for high quality).
  • Employers and employees should monitor the costs of health insurance, changes in plans, self-insured plans by employers’ costs, changes in taxability in benefits to employees and meet with advisors and CPAs to plan for them.

The State of the ACA

  • On November 10 (a week after the election), the Supreme Court is scheduled to hear oral arguments for California v. Texas, a case that that could render some or most of the Affordable Care Act (ACA or Obamacare) unconstitutional.
  • The ACA could be struck down wholly or partially, and a series of provisions could go down with it, including:
    • Protections for people with pre-existing conditions, individual healthcare subsidies, expanded Medicaid eligibility, coverage of people up to age 26 under their parents’ insurance, coverage of preventative care with no patient cost-sharing, and the tax increases that fund these provisions.

Planning for Increased Economic Activity

  • Current pandemic conditions won’t last forever. Businesses should start preparing for the possibility of increased economic activity (possibly from a vaccine or treatment breakthrough).
  • Over 200 vaccines are in early development. Over 40 are in human clinical trials. At least 10 have reached the final stage of testing (Phase 3) worldwide. At least one vaccine will probably prove effective.
  • It will still take several months to distribute a vaccine widely to the public and significantly decrease risk of transmission.
  • Federal and state governments have already started planning rapid vaccine distribution.
  • Interest in rapid testing (where results are less accurate but can take as little as 15 min) is increasing. HHS has started sending rapid tests to states, and some states say they plan to use rapid tests at schools and nursing homes.
  • Businesses should be prepared to accelerate activity based on testing and vaccine conditions – this may require additional working capital.

PPP Loan Forgiveness

  • A PPP Loan recipient is eligible to have the entire amount of its loan forgiven if it was used for eligible payroll and nonpayroll costs, with at least 60% being used on payroll (subject to certain conditions).
  • Forgiveness will be reduced if full-time headcount or salaries / wages declined during the loan period.
  • Employers may be exempt from the penalty to loan forgiveness that is tied to pay, headcount, or hours reductions if they can show:
    • They restored pay and headcount to original levels.
    • They attempted to restore headcount / hours but were unable.
    • They were unable to operate at pre-pandemic levels due to COVID restrictions from HHS, CDC, or OSHA.
    • (This is not an exhaustive list.)
  • Loan forgiveness applications may be submitted any time before the maturity date of the loan, but loan payments are deferred only until 10 months after the last day of the loan forgiveness covered period.
  • The most important things for business owners and accountants to do now is to document everything to show compliance and use their best judgement. (Payroll reports and other records must corroborate loan / forgiveness application numbers.)
  • Participants in other relief programs (especially healthcare firms and government contractors) should take special care as they usually are not able to “double-dip” and include expenses in multiple programs – consult advisors and CPAs for guidance.
  • Talk to your advisors and CPAs about taxability of loan forgiveness in 2020 or 2021. A second round of PPP is possible – keep up with updates from Ryan and Wetmore. ersonal note: Ryan & Wetmore has been providing tax, accounting, financial analysis, due diligence and M&A services for our portfolio companies and investors since 1986. Great firm and I highly recommend!

Personal note: Ryan & Wetmore has been providing tax, accounting, financial analysis, due diligence and M&A services for our portfolio companies and investors since 1986. Great firm and I highly recommend!

Having CPAs and advisors you can trust is crucial heading into this historic period of uncertainty. Contact us here.

6 Ways Innovation and Entrepreneurship Promote Prosperity

entrepreneurship innovation

This is a Guest blog post from Andre Averbug.

It is not a coincidence that the most developed nations are also the ones with the highest levels of entrepreneurial activity and innovation. While starting from a minimal level of development helps support the latter two, for example through basic access to capital and institutional stability, the impact of innovation and entrepreneurship on the economy and society more broadly cannot be overstated. In fact, it goes beyond usual suspects such as increased productivity, competitiveness, and job creation, spilling over to areas as diverse as regulation, infrastructure, the environment, and social inclusion. Below I provide a (certainly non-exhaustive) list of six such effects. While every issue deserves an article (or even a book!) of its own, I provide but a brief overview on each point, leaving the interested reader to dig deeper on his or her own.

  1. Innovation can drive regulatory improvements

Although ideally the right conditions, including regulations, would be in place to enable the occurrence of innovations, the reality is that the order is often inverted. Regulatory changes can be drawn by the innovations themselves, from the bottom up. For example, in Kenya, Safaricom launched a series of increasingly innovative financial services through its M-Pesa platform, such as e-money transfer, virtual savings accounts, and virtual credit. The government watched while the company experimented and innovated and, once the demand for its services were demonstrated, the government enacted and amended laws to adequate the functioning of the financial system to M-Pesa’s offerings. This set a new regulatory stage in Kenya that benefited other fintech startups and helped democratize access to finance. When regulation follows innovation, it tends to work better than ex-ante efforts, which are often based on non-transferable international practices and struggle to support innovations that are not yet fully understood.

  1. Innovation can support infrastructure progress

Innovation can also promote infrastructure development. In the early 2000s, in Africa, the growth of telecom pioneer Celtel was hindered by insufficient cellphone coverage in countries like Congo, Gabon and Zambia. But the company did not just wait for government investments. It took matters into its own hands and invested in cell towers itself, as well as other complementary infrastructure such as roads, to be able to service the towers effectively, and water supply, so workers and their communities could have basic water access in remote areas. This investment has paid off for Celtel, enabling the exponential growth of the business, and the countries where it operates, which benefitted from improved infrastructure. Similarly, in Nigeria, Tolaram launched its popular brand of instant noodles Indomie, the first of its kind in the country, which quickly became a hit and a must-have dish across the country. The growth of the business, however, was being hindered by the precarious infrastructure and logistic capabilities in Nigeria. Tolaram invested more than $350 million in developing its own logistics company, with over 2,000 trucks, and building infrastructure including electricity and sewage and water treatment facilities. Furthermore, the company took a leading role in developing a $1.5 billion public-private partnership to build and operate a deep-water port in Lagos, all to support the long-term growth of its business. Both cases are discussed in details in the book The Prosperity Paradox.

  1. Innovation and entrepreneurship can promote environmental sustainability

There is plenty of evidence that this generation of entrepreneurs and innovators, especially younger ones, tend to be more environmentally conscious than businesspeople from previous generations and government bureaucrats. In fact, many startups are set up specifically to mitigate environmental challenges. Colombia’s Conceptos Plasticos, for example, contributes to the circular economy by using recycled plastic materials to form Lego-style bricks which are then used to build affordable housing. Global startup Airborn Water, in turn, designed a technology that efficiently produces fresh (potable) water from the air’s humidity, contributing to sustainable water supply in even the remotest areas. Moreover, even when the business itself is not focused on solving an environmental issue, (younger) entrepreneurs are generally more mindful of mitigating potential negative externalities, following sustainable practices, and adopting a triple-bottom-line approach to business.

  1. Innovation and entrepreneurship can mitigate social problems

Entrepreneurs are problem-solvers who understand that a problem can become the opportunity for a profitable business. They often build companies around solving pain-points they have identified in their own lives and communities. Many startups have business models that rely on resolving social problems or targeting the base of the pyramid as consumers, workers, and suppliers. In fact, three of the examples provided above – Celtel, M-Pesa and Indomie – illustrate businesses that have great social impact. Also, there is a subset of social entrepreneurs that run non-for-profit enterprises which are committed, first and foremost, to addressing community challenges. Hospital Beyond Boundaries provides health services to poor, underserved communities in Malaysia and Cambodia. Zomato Feeding India combats food waste in India and provides meals to the poor. It has a network of about 25,000 volunteers across more than 100 cities and has served over 33 million meals to people in need.  She Says is an organization that fights for gender rights in India, especially those of women and girls that have been victims of sexual assault and harassment.

  1. Entrepreneurship can promote inclusion and change cultural norms

Many countries face challenges when it comes to the inclusion of minorities and women in the economy. In certain regions of the Middle East and Africa, for example, business is still not seen as an appropriate activity for women. They are expected to take on domestic roles or perhaps become teachers, nurses, or work in traditional agriculture and manufacturing. In Africa, only 9 percent of startups have women leaders, according to Venture Capital for Africa. In such context, the development of programs that promote women’s entrepreneurship, for example through business education, incubation and acceleration, helps debunk taboos and shake the status quo. Initiatives such as New Work Lab, in Morocco, and the Kosmos Innovation Center (KIC) in Ghana, Senegal, and Mauritania, are making targeted efforts to support women entrepreneurs. Similar initiatives abound throughout Africa and the Middle East and are paying off. The landscape for women in the workplace is changing for the better, as female entrepreneurs become role models and serve as inspiration to others, regardless of sector and occupation. And the economy benefits too. According to the Women’s Entrepreneurship Report, women entrepreneurs in the Middle East and North Africa are 60 percent more likely than male entrepreneurs to offer innovative solutions and 30 percent have businesses with international reach, which also exceeds their male counterparts.

  1. Entrepreneurship can strengthen ties with diaspora and help address brain-drain

Many developing economies suffer from brain-drain, with an important share of the well-educated and resourced leaving the country to search for better opportunities in developed countries. The growth of a vibrant entrepreneurial ecosystem creates the opportunity for people to choose to develop their talent and invest their resources locally, instead of voting with their feet. It also motivates the diaspora to re-engage with the local economy by becoming (angel) investors, mentors, connectors – and eventually even returning to their countries. For example, ChileGlobal, part of Fundación Chile, promotes and facilitates the development of business projects and the introduction of innovative technologies through its network of influential Chileans living in the United States, Canada, and Europe. Pangea, in turn, connects African entrepreneurs and successful diaspora members by providing both training and business intelligence for diaspora investors and engaging the diaspora in the startups Pangea has invested in.

Do you have additional points to raise? Examples to share? Agree or disagree with a particular issue? Leave your comments below and let’s keep this discussion alive!

Andre portrait

Andre Averbug is an entrepreneur, economist, and writer. He has over two decades of international experience working in the intersection of economic development, entrepreneurship, and innovation. He has worked and lived in multiple countries across North and South America, Europe, Africa, and Central Asia.

Andre has started and run four startups, in Brazil and the US, and was awarded Global Innovator of the Year in 2009 by World Bank’s infoDev. He has extensive experience supporting companies as mentor and consultant, both independently and as part of incubators such as 1776 and the Kosmos Innovation Center, and programs like Shell LIVEWire, StartUp Weekend and WeXchange.

As an economist, Andre has worked in topics ranging from innovation ecosystems, entrepreneurship and MSME development policy, competitiveness, business climate, infrastructure finance, monitoring and evaluation (M&E), and country assistance strategy for the World Bank, the Inter-American Development Bank (IDB), and the Brazilian Development Bank (BNDES). He has also consulted for clients such as DAI Global, the Economist Intelligence Unit (EIU), TechnoServe, among many others. He holds a master’s degree in economics from the University of London (UK) and an MBA from McGill University (Canada). Andre lives in the Washington, DC area.

He writes an awesome Blog called Entrepreneurship Compass and you can sign up here: https://entrepreneurshipcompass.com

What Does Effective Sales Coaching Look Like?

What Does Effective Sales Coaching Look Like

This is a Guest Blog post from Chris Tully.

What Does Effective Sales Coaching Look Like?

Although much of the world is still experiencing pandemic-related restrictions, business owners are starting to see the light at the end of the tunnel. We constantly hear the phrase “new normal” and it is something that must be adopted by businesses and sales teams who want to come out on top. By embracing the mindset that the new obstacles can be overcome, resilient companies are seeing this as a time of investment into sales strategy and sales coaching to seize the opportunity!

A downturn in the market has historically been a time we’ve seen creative business leaders forged a path to leapfrog their competition. Whether this be on large playing fields or in the small business sector, the key is the ability to propel forward swiftly. One of the key battlegrounds to achieve this kind of success is in the sales trenches. That’s why it’s a critical time to revisit what effective coaching looks like. For owners who fill these shoes, self-evaluation is key to assess their ability and willingness to invest themselves more deeply.

There are four key things that sales leaders need to do in order to effectively coach and lead their sales teams through unprecedented market conditions:

  • Partner with your salespeople and dig deep into market conditions and changes necessary to the sales process. By experiencing the environment firsthand and uniting with your team in the trenches, you will more quickly be able to devise alternative approaches and tools. Gaining buy-in from your sellers happens naturally through this approach because they are involved in the development process while also gaining experiential training on the fly.
    
  • Review and revise sales metrics to align with today’s selling world. Virtual selling has dramatically impacted indicators such as Sales Cycle Length, Number of Outreaches, Presentations and Quotes, etc. Break down prospecting and sales stages to isolate additive areas to monitor productivity until your salespeople have fully adapted to their new environment.
    
  • No matter the previous track record, hold all sales team members consistently accountable to the newly defined metrics. The ability to benchmark performance across multiple salespeople will expedite the solidification of new methods being introduced. It is likely you’ll find tenured salespeople more open than typical during these unprecedented times given that they are also striving to reclaim their high-performance level.
    
  • This is an ideal time to span across industries you’ve previously seen the greatest success. To do so effectively, develop a laser focused strategy by refining your sales process to accommodate varying industries. Equip your salespeople with industry specific sales playbooks to include unique sales messaging, insights into market trends and conditions, customized buyer process stage mapping, etc. Empowering your team with this level of preparation will give them confidence and clarity as they explore new areas.

If you’re an owner who holds the sales leader seat in your organization, it’s time to scrutinize options to fulfill the granular level of leadership needed right now. The unique solution of an Outsourced VP of Sales may be the answer. This resource is equipped to coach and manage your sales team while also partnering with senior leadership to formulate company pivots or directional changes. This allows the Owner to focus on big picture objectives while having peace of mind that sales implementation is being led by a professional that is familiar with “what it takes” to come out on top.

How do you determine your company’s sales objectives each year? Do you have a documented sales process that is consistently followed? What keeps you up late at night thinking about your business? Take my FREE SALES ASSESSMENT QUIZ today to gain exposure into key questions you want to be asking yourself to stimulate new ideas.Click to take my Sales Assessment Quiz

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Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”

Leading a Sales Team out of a Slump

This is a guest blog post from Chris Tully.

Leading Your Sales Team Out of a Slump

Leading Your Sales Team Out of a Slump

Sorry to be the bearer of bad news, but a sales slump can, and will likely happen to every business at some point. One minute, your company sales are cruising along, only to be hit by stagnating or plummeting revenue. These speedbumps in growth can be caused by a variety of reasons, but business owners and sales leaders need to be able to recognize early warning signs and commit to the right steps to get back on the path to success. Too often, there is pressure to do more, when instead the approach should be on doing the right things better.

Current business conditions have brought many new obstacles and distractions which have salespeople’s heads spinning as they try to determine effective next steps. The new sales landscape has also made holding salespeople accountable challenging for owners and sales leaders.

If this sounds familiar, it is time to usher your salespeople into a new normal that will make them stronger and more resilient performers. The first step is for company leaders to get a pulse on the conditions the salespeople are navigating within. Just as important is to take note of your team’s mindset by gauging their confidence level and readiness to engage in a new landscape. Leveraging a senior sales consultant is a worthwhile consideration for such an important evaluation to ensure an effective recovery plan can be developed. It’s natural that your sales reps will need to regain their self-confidence by seeing new approaches modeled. Providing them with a resource that has a proven track record navigating changing market conditions, will expedite their ability to transform their sales approach.

Leadership

In the meantime, here are three practical things you can implement immediately to help your sales team reclaim their balance.

1. Incorporate Activity Reporting

If your sales team is struggling, daily check-ins for a period of time can create a way for your salespeople to share a high-level review of their day including successes as well as difficulties. Avoid turning this into micromanagement by encouraging use of technology to simplify the process. Activity reports can be done with a voice recording, video or chat tool. Drop them a call, voicemail or email every few days after reviewing their daily reports to share feedback, encouragement, and ideas. The goal of daily activity reporting is to bring focus to the fundamental sales activities needed to grow results and to spot early signs of trouble, lack of alignment or to collaborate to get them “un-stuck”.

Based on individual progress, work up to a weekly report cadence once you can tell the salesperson is on the right track with activity consistency, positive mindset, and renewed clarity on how to navigate. This report can dive in deeper on client activity, sales numbers, difficulties, and goals for the upcoming week. And again, make sure you are responding to the weekly reports to engage with your team. Owners and sales leaders should consider taking the information from the reports to summarize in a weekly message to the sales team. Recognize individual successes, help set goals, give encouragement, and address issues from a leadership role to maintain an open line of communication with the sales team while also fostering the spirit of teamwork.

2. Shift from Time Management to Productivity Management

We cannot manage time, but we CAN manage our actions.   It may seem elementary, but it’s time to revisit the basics of prioritization with your sales team. Without basic best-practice guidelines in place during turbulent times, even a top performer can get derailed!

Walk through the basics of calendar blocking for prospecting time, ending every day with creating a plan for the following day, and protecting time by grouping together meetings and non-selling activities. Let your team know where you want them spending their time and focus throughout the day.

While it sounds simple, productivity is generally a difficult skill for salespeople to master due to how their brains are commonly wired. This is exacerbated given the multitude of tasks to be accomplished each day. With a little guidance, you can lead your team to not think about “multi-tasking” for portions of their day. Instead, by them giving undivided attention and focus to the sales tasks at hand, they will have the clarity to achieve success and complete all necessary customer objectives more effectively.

 3. Virtually Moving Ahead

Like it or not, virtual meetings will continue long after the pandemic is behind us, so it is essential to ensure your team is acclimated to engaging with customers in this format. Start by determining if your team is prepared, knowledgeable, and comfortable with adapting their sales approach, including embracing the technology needed to efficiently lead and run meetings. Don’t take their stated confidence for granted. Consider virtual meeting training as the “new normal” format to support the likelihood that virtual selling will continue for some time, maybe forever in certain industries. Learn virtual best-practices and use these tools to differentiate your company from your competitors. 

Even though the goals of virtual and in-person meetings are the same, you will likely need to partner with the sales team to create new approaches and tactics for virtual meetings. Sales teams need to adapt their approach to prospecting, building rapport, uncovering needs and gaining buy-in, as all of these facets of the buy/sell relationship are different in a virtual environment. As the leader, it is your role to ensure the team has access to proper technology, and easy to use digital versions of all documents. Schedule and lead training sessions using role-plays through your video platform to evaluate and improve sales performance. Your company’s digital selling experience demonstrates your company’s professionalism and will influence the customer opinion and buying decision.

While no business owner or sales team leader wants to experience a sales slump, it’s bound to happen. The key to getting out of the slump quickly will be dependent on the company leaders recognizing the warning signs and partnering with the sales team to create a path forward. Even starting with the three simple changes we mentioned above, consider it the first step up toward recovery. With salespeople anxious about job security and other personal challenges, given the current conditions businesses are experiencing, supervisors who push and seek to control may only amplify the stress. These times call for owners and leaders to shift their focus from pressing for performance to supporting their people and leading the way to provide a sense of direction.

Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”

How to Use CRM to Add Value to Your Sales Team

This is a Guest Blog Post by Chris Tully.

Your customer relationship management (CRM) software system is filled with details about the people and companies most important to your business. But are you using CRM to add value to your sales team?

If you haven’t set up a CRM system to actively monitor and effectively track the steps your sales team takes with business opportunities, then you’re both walking around with your eyes closed. You can’t see what the sales team is doing – and neither can they.

If It’s Not in CRM It Didn’t Happen

About one-third of small to mid-sized businesses I encounter don’t have a CRM system. They are still managing the business on email and spreadsheets. About half of the remaining businesses have purchased CRM software but haven’t fully implemented it. Still others use their CRM for marketing or customer service, but not sales – missing the value of integrating the functions.

In my opinion, if sales activities are not visible in CRM they didn’t actually happen. I’d go so far as to say that if your sales team closed a deal that was not in CRM, hold back the commission. That may sound draconian, but I believe you’d only have to do that once to make the point.

Sales CRM is highly effective for the money. You and your team have the ability to see leads as they are captured, follow the progression of contact and communication through your sales stages, and easily record results. This allows the sales leader to be a more effective coach, gives immediate visibility to results, and provides some insurance if one of your salespeople leaves.

In the bigger picture, capturing all stages of the sales cycle allows you and the team to analyze what works best and recreate the most successful steps – continually refining and improving your sales effectiveness and growing your business.

CRM Guides the Sales Path

Clearly defining sales stages is valuable for your team. For example, Salesforce CRM software allows you to customize the objectives of each stage, enabling a sort of “guided path” to follow. Within the software, there are a series of questions that have to be answered positively before someone can progress. Seeing the hurdles that have to be cleared to reach those objectives can only help your sales force improve.

A good CRM helps the team better quantify sales leads. They can build a qualification score to see how strong each lead is (or becomes) by assigning points as the deal progresses. For example, is a compelling event driving the customer’s decision on the deal? Is an economic ROI stated or implied? Has the decision maker gotten involved in the evaluation of your proposal? All of this allows you as a leader to monitor progress and assess effectiveness.

The more disciplined your sales team is in following an effective, repeatable process and quantifying deals against the rubric you set up, the better they will be as salespeople and the more you’ll increase your company’s sales.

CRM Engagement Is Key to Adding Value

In order for your sales team to embrace CRM, the system has to:

  • Be easy to use
  • Add value by supporting and guiding the sales process
  • Be the “ground truth” of all sales reporting to and by company leadership

Promote engagement by taking two giant steps to successful CRM implementation: get used to asking questions of your sales team that can only be answered by referring back to the CRM, and make your CRM the source for all sales reporting in the company.

You’ll be able to quickly customize reports to illustrate specific sales performance indicators, and visually represent the team’s up-to-the-moment performance in the key metrics you choose to display on your dashboard.

Choosing a CRM System

There are at least 10 good cloud-based CRM systems out there that can meet the needs of most sales teams. There are also sites to help you decide which system to choose. Final choice will be your personal preference, but from my perspective you can’t go wrong with SalesforceHubSpot, or Pipedrive.

Selection and implementation are important. However, engagement is what will make or break CRM effectiveness. The single most important quality of a CRM system is that it adds value to your sales team – it should make their work easier, and help them be more successful.

Chris Tully is Founder of SALES GROWTH ADVISORS. He can be reached at (571) 329-4343 and ctully@salesxceleration.com“For more than 25 years, I’ve led sales organizations in public and private technology companies, with teams as large as 400 people, and significant revenue responsibility.I founded Sales Growth Advisors to help mid-market CEOs execute proven strategies to accelerate their top line revenue. I have a great appreciation for how hard it is to start and grow a business, and it is gratifying to me to do what I am ‘best at’ to help companies grow faster and more effectively.Let’s get acquainted. I am certain I can offer you an experienced perspective to help you with your growth strategy.”